The cycle of the payday loan is a well-known horror story. A person needs money, and they need it fast, so they visit a payday lender with names like EZ Cash or Cash Express. They get their money on the spot. The trouble comes later, when it’s time to repay the loan. Most borrowers default on that small-dollar loan, which is how EZ Cash profits—as the loan is renewed or rolled over and the fees rack up.
One of the last regulations published under President Obama’s director of the Consumer Financial Protection Bureau (CFPB), Richard Cordray, was a 2017 rule that would have curbed the most-egregious forms of payday lending. The Trump administration on Wednesday proposed to revise that rule—aiming to gut a powerful provision designed to protect borrowers.